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Comments Off on When Money Is Tight, Should You Still Treat Yourself?
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Between inflation, tariffs and a tougher job market, many Americans are in frugal mode. In fact, 52% are eating out less, 48% are spending less on clothing, and 39% are cutting back on travel, according to a Yahoo Finance/Marist Poll taken in May.
But is treating yourself out of the question when you’re trying to keep to a budget? What about if you’re on a “No Buy” kick where you’ve pledged to stop eating out or shopping altogether? Should you ever treat yourself?
Yes, actually. While you don’t want to use needing a treat as an excuse to lose your determination, giving yourself a reward every now and then can actually boost your resolve and improve your chances of reaching your financial goals. It’s all about knowing when and how to do it.
When You Should Treat Yourself
No one wants to be worrying about financial instability or making it to the next paycheck. And for most of us, discipline is key to building financial security. Impulse buying was shown to delay big financial goals for 52% of impulsive spenders, according to a 2023 online survey by The Harris Poll and YNAB.
But there are risks to going overboard. For one, it’s stressful worrying about every single expense. And during economic uncertainty, allowing yourself a small indulgence like a new lipstick or book can be a form of coping, providing a sense of control.
Being too restrictive can also make you feel deprived and then backfire, triggering a spending spree. The American Psychological Association suggests willpower is like a muscle that can become exhausted if used too frequently. The key is to plan for occasional indulgences, so you can satisfy the desire without jeopardizing your overall financial health.
Here are some specific situations when it can make sense to treat yourself — in moderation:
1. To celebrate an achievement. Rewards reinforce good behaviors. So if you’ve landed a new job, a dinner out could be a great way to celebrate. (Pro tip: If you’ve been looking to try that super fancy new restaurant but it’s out of your budget, go for lunch or brunch instead. It’s usually a cheaper way to experience the same ambiance and food.)
2. To invest in your mental health. If you’re stressed out, there’s nothing wrong with getting a massage, a therapy session, or even a higher quality mattress. Self-care is usually a worthy expense, and will put you in a better frame of mind for working toward your financial goals.
3. To give you a release valve: If you’ve ever been on a diet, you probably know that being too restrictive almost never works. The last thing you want is to derail your progress. So if a small splurge is what’s going to prevent a huge splurge, it’s worth it.
4. To make yourself happy: Being thoughtful and intentional with your money is the opposite of impulse buying, which people often regret. If there are occasional treats that will actually make you feel good — and not put you into debt — they’re important.
When You Should Hold Off
Too much treating yourself can throw your finances out of whack, keep you from feeling prepared for emergencies, and even leave you feeling guilty and ashamed. The trick is understanding your underlying motivations.
Here are key considerations to help you determine when to hold off:
1. Overspending and adding to debt can increase your stress level. A treat should make you feel good, not anxious and regretful. Plus, being stressed can actually make you vulnerable to more impulse spending, according to the TIAA Institute.
2. Small expenses add up. Indulgences like coffees out or Uber rides might not feel that expensive, but they add up if you treat yourself a lot.
3. Emotional spending can leave you gutted. Studies have shown that shopping triggers the release of dopamine, the brain’s “feel-good” neurotransmitter. But this mood boost is short-lived, and the subsequent letdown can create almost addictive behaviors. You want to spend again to regain that positive feeling.
4. Fear of missing out (or FOMO) isn’t a good reason to treat yourself. Impulse buys driven by sales or trends can lead to regret and clutter.
How to Treat Yourself and Keep to Your Budget
Incorporating the occasional indulgence into your financial plan can make you happier and healthier — without compromising financial health. Here are some strategies to treating yourself responsibly:
1. Allocate a budget. Plan ahead by designating a specific portion of your income for treats. This will ensure they don’t interfere with essential expenses or savings goals.
2. Be sparing. Treats are only treats because you don’t have them that often. If the novelty wears off, you won’t enjoy them much.
3. Rely on treats that don’t require money. Get out from behind your desk to walk in nature, visit a local museum on its free admission day, or take a bubble bath or nap. Here are some other fulfilling ways to treat yourself with little or no expense.
4. Practice mindful spending. Before buying a treat, stop and take a minute to check in with yourself. This will help you make intentional choices and avoid impulsive buying.
5. Prioritize treating yourself to experiences over things.Doing something — like attending a concert or exploring a new hobby — often provides more lasting satisfaction than a physical item.
6. Plan (way) ahead for larger indulgences. If you want to treat yourself to a vacation or high-end gadget, make a plan to save incrementally. For example, if your treat costs $2,000 and you have $50 a week of wiggle room in your budget, mark your calendar for 10 months out. You’ll have something great to look forward to.
Image credit: Bernie Pesko/SoFi Source iStock
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
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Comments Off on Don’t Have Access to a 401(k)? How to BYO Retirement Savings
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We hear it all the time: Don’t put off saving for retirement. Contribute as much as possible — starting as early as possible — and you’ll dramatically improve your chances of financial security in the future.
And many people seem to be getting the hint. Workers with 401(k)s at both Fidelity Investments and Vanguard are contributing record shares of their paychecks, new data shows. At Fidelity, 401(k) participants saved 14.3% in the first quarter (including employer matches,) coming closer than ever to the company’s recommended 15% target.
There’s just one glaring problem: Not everyone has access to a 401(k). In fact, an estimated 47% of private sector workers in the U.S. — 59 million people — lacked access to a workplace retirement plan of any kind in 2023, according to a March report from Georgetown University’s Center for Retirement Initiatives.
And saving for retirement can feel a lot more challenging if you’re doing it DIY-style with an IRA or similar type of account. Last year 91% of people with access to an employer-sponsored plan like a 401(k) were saving for retirement, compared to 56% of those without access, according to a Transamerica Center for Retirement Studies survey.
So what? Workplace accounts can provide a big boost when it comes to saving for retirement, especially when your company matches some of your contributions. But they’re not the only game in town. Don’t let your work situation keep you from planning for your future. If your job doesn’t offer a retirement plan or you’re self-employed, consider these other popular ways to build a nest egg:
• Use an IRA. If you or your spouse don’t have access to a workplace plan, the money you put into a traditional IRA can lower your taxable income and potentially grow on a tax-deferred basis in much the same way as it would in a 401(k). You’re not allowed to save as much — in 2025, the limit is $7,000 in an IRA vs. $23,500 in a 401(k) unless you’re over 50 — so the earlier you start, the better. If you’re income-eligible, there are also Roth IRAs, where you pay taxes on the money upfront but then it can grow tax-free.
• Set up your own workplace retirement plan if you’re self-employed. If you’re a business owner, freelancer, independent contractor, or gig worker, see if you’re eligible to open a solo 401(k), SIMPLE IRA or SEP IRA — some of which may let you save even more than if you worked for someone else.
• Save in a plain ‘ol brokerage account: You won’t get any tax breaks from it, but the lack of red tape can be freeing otherwise. There are no income limits and no caps on how much you can invest.
• Set up a 401(k)-like direct deposit: You can have a portion of every paycheck go to retirement even if you don’t have a 401(k). Research shows that people are 15 times more likely to save for retirement if money is deducted automatically from their paychecks, according to Pew Charitable Trusts.
• Use a roboadvisor: Many brokerage firms — including SoFi — give you a choice of how hands on you want to be with an IRA or brokerage account. A roboadviser picks out and manages your investments for you based on your retirement goals, so all you have to worry about is funding your account.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
• Home equity loans typically offer much lower rates than unsecured personal loans and credit cards.
• Home equity loans provide a lump sum with fixed interest rates.
• The prime rate and the borrower’s credit score and financial history go into determining your rate.
• To secure the most favorable rates, keep your credit in good standing and your debt-to-income ratio low (ideally, below 36%).
• Before you apply, compare offers from multiple lenders and be sure to review the Loan Estimate form.
• Weigh the risks and benefits, and don’t forget to consider alternatives like a HELOC or cash-out refinance.
Introduction to Home Equity Loan Rates
If you’re exploring home equity loan interest rates in Collins, Mississippi, we can help. This guide will explain a bit about interest rates in general and the home equity loan application process. By the end, you should have a good understanding of how to secure the lowest available rate for your home loan, potentially saving you thousands of dollars.
A home equity loan is a smart way to get equity out of your home, providing a lump sum of cash that you can use however you want. The amount you can borrow is based on the difference between your home’s appraised value and the remaining balance on your primary mortgage.
Let’s look at an example based on the average home value in Collins, which in July 2025 was just under $150,000. If your home is appraised at $150,000 and you owe $100,000 on mortgage, you have $50,000 in equity. Most lenders will allow you to borrow up to 85% of your equity, which is $42,500 in this case. Home equity loans typically feature fixed interest rates, making them a steady and predictable option. They’re great for large, one-time expenses and typically offer lower rates than unsecured personal loans.
A home equity loan calculator can help you determine your equity level and how large a loan you might qualify for.
Where Do Home Equity Loan Interest Rates Originate?
The interest rates on home equity loans are the result of economic conditions and your own financial situation. The Federal Reserve’s decisions have a ripple effect on the broader lending market, which in turn influences home equity loan rates. Lenders typically set their base rates by adding a margin to the prime rate, which moves in sync with Fed policy.
Your credit score and debt-to-income ratio are also significant factors, with higher scores and lower ratios typically leading to more favorable rates. The loan amount and term can also play a role, with longer terms and larger loans often carrying higher interest rates due to increased risk.
How Interest Rates Impact Affordability
Your interest rate is a big deal when it comes to the affordability of a home equity loan. Even a fraction of a percent can add up to significant extra interest over the life of the loan. For example, a $30,000 home equity loan with a 15-year term at 8.50% interest has a monthly payment of $295 and total interest of $23,176. At 9.50% interest, the monthly payment jumps to $314 and the total interest comes to $26,388.
While a $20 difference in your monthly payment might not seem like much, it adds up. The higher interest rate will cost you more than $3,200 over the life of the loan. And the longer your repayment term, the higher those interest costs will be.
Home Equity Loan Rate Trends
Predicting interest rate movements is challenging due to the many factors involved. Still, with a little practice, you can get a sense of where interest rates are heading. The recent history of the prime rate, which home equity loan rates are tied to, shows how much variability there can be. In 2020, the prime rate hit a historic low of 3.25%. By 2023, it had shot up to 8.50%.
The goal is to time your application to catch lower rates. During times of extended elevated rates, that’s not always possible. That’s why it’s important to compare offers from multiple lenders to make sure you’re getting the best rate that’s currently available.
To secure an enviably low rate, you’ll need to present your best financial self. A robust credit score of 680 or above and a debt-to-income ratio below 36% are ideal. By working on your credit and shopping around for the best deal, you’ll be well on your way to scoring the most wallet-friendly terms and keeping those borrowing costs down.
Maintain Sufficient Home Equity
To be eligible for a home equity loan, homeowners must maintain at least 20% equity. To calculate your home equity, simply subtract your mortgage balance from your current home value. For example, if your mortgage balance is $140,000 and your home is valued at $200,000, your home equity would be $60,000, or 30% — well within the qualifying zone.
Equity is the key to unlocking a home equity loan, and ensuring you have enough is an important first step before you apply for any type of home equity loan.
Build a Strong Credit Score
Lenders generally look for a credit score of 680 or higher when considering home equity loans, with many favoring 700 or above. A robust credit score is a testament to your financial prudence and can significantly impact the rate you’re offered. Borrowers with a track record of timely payments and low credit utilization are more likely to secure favorable terms, potentially saving you thousands in interest over the loan’s lifetime.
To bolster your credit score, simply stay on top of your bills, keep credit card balances in check, and resist the urge to open multiple new credit lines at once. Regularly reviewing your credit report for inaccuracies and disputing them can also give your score a lift.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is another important number that lenders look at when determining your eligibility for a home equity loan. Your DTI, which compares your monthly income to your monthly debt obligations, should be below 50%, and even better, below 36%. A lower DTI ratio shows lenders that you have a good handle on your monthly payments, which can lead to more favorable loan terms.
To improve your DTI, consider paying down your existing debt, increasing your income (easier said than done, right?), or both. Lenders want to be sure that you can handle the additional financial responsibility without the risk of default.
Obtain Adequate Property Insurance
This requirement might come as a surprise: Property insurance is a must-have for home equity loans, particularly in flood-prone areas. But it makes sense, since insurance safeguards both the lender’s investment and your home. Having the right insurance can even influence the interest rate you’re offered, as lenders often see well-insured properties as lower risk.
Pro tip: Chat with your insurance provider to suss out the best coverage and costs, and don’t be shy to shop around for the most competitive rates and terms.
Current home equity loan rates by state.
Compare current home equity loan interest rates by state and find a home equity loan rate that suits your financial goals.
Select a state to view current rates:
Tools & Calculators
Using these resources wisely can help you make informed decisions about home equity loans. By playing with different rates and terms, you can see how they impact your overall costs. And when you’re ready to move forward, comparing loan estimates from multiple lenders will help you find the best deal. Be sure to review all the details, including fees, to find the most suitable loan for your needs.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
Typically, closing costs for home equity loans fall between 2% and 5% of the loan amount. Standard fees include the appraisal, credit report, document prep, title search, and title insurance. Appraisals can be anywhere from $300 to $500, and credit reports for lenders average $50 to $100. Document prep has a wide range, from $500 to $2,000. Title searches usually cost between $100 and $250, and title insurance might be 0.5% to 1% of the loan amount.
Tax Deductibility of Home Equity Loan Interest
The interest you pay on a home equity loan might just be tax-deductible, especially if you’re using it to buy, build, or spruce up your home. The current rules are in play through 2025. If you’re married and filing jointly, you can potentially deduct the interest on loans up to $750,000; for single filers, that’s $375,000. Just remember, you’ll need to itemize to claim this deduction. It’s a great perk that might make a home equity loan even more attractive.
Alternatives to Home Equity Loans
You might also consider a HELOC or a cash-out refinance. All three options allow you to tap into the equity you’ve built in your home, but each has its own features and requirements. A cash-out refi is a type of mortgage refinance, where you end up with one payment instead of two. A HELOC is more like a credit card, allowing you to take out money as you need it.
Home Equity Line of Credit (HELOC)
A HELOC is a credit line that allows you to borrow up to a certain limit determined by your home equity. But you only pay interest on the amount you use. Just keep in mind that the interest rate can fluctuate with the market, which could mean increased costs if rates go up.
Lenders typically look for a credit score of 680 or higher (700 is preferred) and a debt-to-income ratio of less than 50% (ideally less than 36%). A HELOC is a great option if you’re not sure of the total amount you need to borrow or if you expect to have costs spread out over time.
During the initial “draw period,” which is usually 5-10 years, you usually make interest-only payments. (A HELOC interest-only calculator can show you how much payments might be based on the interest rate and amount borrowed.) Then during the repayment period, of 10-20 years, you stop borrowing and repay the full amount. (A HELOC monthly payment calculator can calculate what your payments will be including principal and interest.)
A cash-out refinance is like hitting the reset button on your mortgage, but with a little extra cash in your pocket. You can typically borrow up to 80% of your home’s value, and you’ll need a credit score of 620 or higher and a DTI of 43% or less to qualify. The beauty of a cash-out refinance is that you can simplify your finances with just one monthly payment. Plus, it’s generally easier to qualify for than a home equity loan or HELOC.
Installment loan: Borrowers get a specific amount of money all at once that they then immediately begin repaying, with interest, in regular installments.
Revolving credit: Borrowers receive a line of credit. They have a draw period (5-10 years) during which they borrow and can only pay interest, followed by a repayment period (10-20 years) to repay the principal plus interest.
Installment loan: Borrowers receive a lump sum payment from the excess funds of their new mortgage, which has a new rate and repayment terms.
Repayment Term
Generally 5-30 years
A draw period of 5-10 years, followed by a repayment period of 10-20 years
Generally 15-30 years
Fees
Closing costs (typically 2-5% of the loan amount)
Closing costs (typically 2%-5% of the loan amount), plus other possible costs, depending on the lender (annual fees, transaction fees, inactivity fees, early termination fees)
Closing costs (typically 2-5% of the loan amount)
The Takeaway
Home equity loans can be a powerful financial tool for homeowners seeking to tap into their home’s equity for major expenses. However, it’s important to evaluate your financial situation and shop around with multiple lenders to secure the best home equity loan rates in Collins. Your credit score, debt-to-income ratio, and the amount of equity in your home all play a role in determining the interest rate you qualify for. Before you apply, make sure you understand the risks and benefits, and consider alternatives like a HELOC and cash-out refinance. By making informed decisions, you can use your home equity to reach your financial goals.
SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.
Unlock your home’s value with a home equity loan from SoFi.
You can use a home equity loan for just about anything you want. Common uses include large purchases, home improvements, and paying off high-interest credit card debt. The flexibility of these loans is what makes them so attractive.
What’s the monthly payment on a $50,000 home equity loan?
The monthly payment for a $50,000 home equity loan depends on the interest rate and loan term. For instance, at an 8.50% interest rate over a 15-year term, you’re looking at $492 per month. If you extend the repayment term to 20 years, the monthly payment drops to $434 – however the overall cost of the loan will actually increase, because you’re paying interest for longer.
What’s the monthly payment on a $100,000 HELOC?
A $100,000 HELOC usually comes with a variable interest rate, which means your monthly payment could fluctuate. During the draw period, you might only pay interest. At a 9.00% interest rate over a 10-year draw, your payment might be $750, not including rate changes. Once the draw period ends, you’ll start paying back both the principal and interest. With a 20-year repayment period, your payment could increase to about $900.
What’s the monthly payment for a $25,000 home equity loan?
The payment on a $25,000 home equity loan varies with the interest rate and loan term. For instance, at a 9.50% interest rate over a 10-year term, the monthly payment would be about $324. If you choose a repayment period of 15 years, the monthly payment drops to $261 — but you’ll end up paying more in interest over the longer term.
What might hinder your chances of securing a home equity loan?
There are several factors that can disqualify you from getting a home equity loan. The most common is not having enough equity in your home. Most lenders require 20% equity or more. Lenders also look at your debt-to-income (DTI) ratio, which should be 43% or lower (ideally, below 36%). Additionally, a poor credit history can prevent you from getting a home equity loan. If your credit score is below 620, you may have a hard time getting approved.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee. Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
If you’re contemplating car financing, you likely want to compare your options. Whether you’re in the hot seat at a dealership’s financing office or doing research at home, you need to quickly and easily find the best car loan for an upcoming vehicle purchase.
This auto loan payment calculator gives you a clear view of the monthly payment you can expect and total interest you’ll pay, just by entering a few loan details.
Key Points
• To estimate auto loan payments, input the total loan amount, term length, and interest rate into the calculator.
• Adjust the variables to match your budget and available loans.
• Evaluate different scenarios to find the best loan offer.
• Review the breakdown of principal and interest to understand payment structure.
• Calculate the estimated total interest to be paid over the loan term.
Calculator Definitions
When using the auto loan payment calculator, you’ll want to understand these terms:
• Down payment: An out-of-pocket portion of the vehicle purchase price that you pay upfront. This figure reduces the loan amount you’ll borrow.
• Principal: The base loan amount that’s borrowed for the vehicle purchase.
• Interest rate: This is the cost of borrowing the loan. The interest rate is expressed as a percentage of the principal. (You might see it sometimes shown as an APR, or annual percentage rate, which includes the cost of interest plus fees.)
• Loan term: The length of time, expressed in months or years, that you’ll repay the loan.
• Monthly payment: The amount that you’re required to pay each month as a loan installment. It includes a portion of the principal and interest charges.
How to Use the Auto Loan Payment Calculator
You can get started with the auto loan payment calculator in three simple steps.
1. Enter the Loan Amount
Use the slider to enter the loan amount you intend on borrowing. You can also type the amount into the field provided. The amount can be as low as $5,000 up to $100,000.
2. Enter the Loan Term
Enter the loan term, or repayment duration, in years using the slider or by typing it into the text field. Available loan terms are usually between one and 10 years.
Some loan terms are expressed as months. If this is the case with your loan, divide its repayment term by 12 to get the number of term years. For example, a 72-month term, divided by 12, is a 6-year loan term.
3. Enter the Interest Rate
Input the interest rate for the loan into the “interest rate” text field.
As you make changes to each loan detail field, you’ll see the auto loan payment calculator dynamically update your estimated monthly payment information on the right. You’ll see insightful breakdowns, like your monthly payment amount, how much of that payment is applied to the loan principal vs. interest, and the total interest you’ll pay over the loan term.
As you may have noted, this is not an auto loan calculator with credit score. It will calculate payments and total interest based on an interest rate vs. a score.
Benefits of Using an Auto Loan Payment Calculator
Using an auto loan payment calculator empowers you to make informed decisions before financing your next vehicle. It helps you:
• Budget your monthly finances by offering concrete estimates.
• Compare auto loan financing offers.
• Visualize how loan terms impact your monthly payment.
• Understand how much of each payment goes toward the principal balance.
• See how much you’re paying in total interest charges.
How to Use the Auto Loan Payment Calculator to Compare Scenarios
A practical way to use the auto loan payment calculator is by adjusting each variable — loan amount, loan term and interest rate — to guide you toward your ideal loan offer.
Scenario 1. Say you check your budget and use a money tracker app and determine that you can spend $500 a month for a car payment. You are considering making a down payment of $10,000 toward a $40,000 car.
This means the loan amount you’d finance is $30,000. Assuming a five-year term at 6%, your estimated payment is $1,079.99. This estimated monthly payment is more than twice your budgeted amount, so this loan isn’t financially feasible.
Scenario 2. To get closer to your preferred monthly payment budget, you consider buying a more affordable car and extending your loan term. The next car you consider requires a loan amount of $20,000, and you choose a 7-year term at 6%. Now, your estimated monthly auto payment is $530.27 — much more in line with your desired budget.
By using the auto loan payment calculator in this way, you can find which particular vehicle and loan suits you best.
A credit score is a three-digit number that summarizes your creditworthiness, based on your past and current borrowing and repayment habits. The Fair Isaac Corporation (FICO®) is a popular credit scoring model that’s used by lenders to assess how risky lending to you might be, however, the VantageScore is another commonly used model. One key similarity between the VantageScore vs. FICO is that both generally use a credit score range from 300-850.
Although each scoring model looks at similar data points, they differ in how impactful each factor is in their respective calculations. Your credit score updates regularly (often monthly), based on your most recently reported repayment and borrowing activity.
How to Build Credit
Understanding how to build credit and what affects your credit score can help you maintain a strong credit profile. Building your credit isn’t a precise science — instead, practicing responsible borrowing and payment behavior can positively impact your score overall. Paying at least the minimum payment due on your credit cards and loans each month can have a major influence on your FICO score; it makes up 35% of your score calculation.
Credit utilization, which is the amount of credit you use compared to your available credit, determines 30% of your FICO score. Keeping your credit utilization under 30% or ideally 10% of your available credit can help build your score. (A spending app might help you take control of this figure if yours is running high.)
Responsibly managing a mix of credit types and not opening multiple new credit accounts in a short period can also positively impact your score.
If you are working on building your score to qualify for more favorable terms, you might use a credit score auto loan calculator to gauge the impact of this activity.
There are different types of credit that come together to form your credit file. The main credit types include:
• Revolving credit. A revolving account typically provides you with the ability to borrow against a credit line up to a predetermined credit limit. Common examples include credit cards, retail cards, gas station cards, and home equity lines of credit (HELOCs).
• Installment credit.Installment credit offers a fixed payout that is disbursed upfront as a lump sum. Then, you’ll make smaller installment payments over multiple months until the principal balance, plus interest and fees, are repaid. Auto loans, student loans, and home loans are examples of installment debt.
• Open credit. With open credit, the full payment is due each month or statement cycle. This type of credit account is typically seen through service providers, like for utilities or your cell phone.
Examples of Credit Score Ranges
Scoring models might have different score ratings and ranges. Below is an example of a basic FICO score range:
• Excellent: 800-850
• Very Good: 740-799
• Good: 670-739
• Fiar: 580-669
• Poor: 300-579
You may be curious about your starting credit score. It’s not typically 300, the lowest possible score. Rather, once you have several months of credit history, if it’s responsible, you might be in, say, the good range.
Credit Score Tips
Before you shop around for an auto loan, knowing where your credit stands and addressing any areas to positively impact your score can help you secure a more favorable financing offer.
• Credit score monitoring can help you track new credit inquiries, account openings, and flag issues, like fraudulent activity. This in turn can protect your score.
An auto loan calculator can help inform your search for financing that aligns your budget and long-term financial goals. An important step in getting favorable loan terms can be maintaining or building your credit score. Tracking and managing your money can help you in that pursuit.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights—all at no cost.
See exactly how your money comes and goes at a glance.
SoFi does not offer auto loans at this time, though we do offer auto loan refinancing through our partnership with Lantern.
FAQ
What credit score do you need for a car loan?
There’s no gold-standard score that automatically qualifies you for a car loan. Generally, a minimum credit score of 670, which is considered good under FICO’s scoring model, can help qualify a person for a loan. However, the higher your score, the better your chances at getting approved for an auto loan.
What APR will I get with a 700 credit score for a car?
Borrowers with prime credit, which includes a 700 credit score, have an average new auto loan rate of 6.70% APR and 9.06% APR for a used car loan as of June 2025.
Can I get a $30K car with a 650 credit score?
A 650 FICO score is considered “fair” which is slightly lower than the average U.S. consumer. Lenders might be willing to finance a $30K car loan based on this score or might require a cosigner on the loan agreement.
How much does a credit score go down when applying for an auto loan?
Applying for an auto loan involves a hard inquiry into your credit history. This inquiry can temporarily lower your score by several (say, five) points.
Why did my credit score drop 100 points after paying off my car?
Identifying why your credit score might drop 100 points after paying off an auto loan is complex since your score is comprised of multiple factors. For example, the drop could be a result of the account now being closed, which shortens your credit history; changes in your credit mix; or other reasons.
What interest rate can I get with a 750 credit score for a car?
The average auto loan rate for consumers with prime credit (661-780) is 6.70% for a new car loan to 9.06% for a used car loan, according to June 2025 Experian® data.
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Budgeting can be a very valuable way to keep tabs on your money and make sure you are moving toward your financial goals. By using a personal monthly budget calculator, you can better understand your income, spending, and savings to stay on track or make adjustments as needed.
Here, you’ll learn how to use this free monthly budget calculator, plus gain valuable insights into budgeting techniques and tips.
Key Points
• With a free monthly budget calculator, you can start by entering monthly income before taxes and then input income taxes from pay stubs.
• Adding all monthly expenses, including fixed and variable costs, can help you track spending.
• The calculator determines net monthly savings by subtracting total expenses from income.
• Experiment with different budget scenarios to plan for financial goals.
• Use budgeting methods like 50/30/20, zero-sum, and envelope systems to find the right fit and gain better financial management.
Calculator Definitions
When using your free monthly budget calculator, you’ll want to have your financial details available to enter. Here’s a selection of the information you’ll need handy:
• Income: Enter your monthly income before taxes
• Income taxes: Account for federal, state, and municipality income taxes, which will vary depending on your total earnings and qualifying deductions or exemptions
• Housing: Include rent or mortgage payments, utilities, property tax, insurance, and home maintenance expenses
• Groceries: Tally food, toiletries, and household supplies
• Entertainment: This spending category is where you account for dining out, events (movies, plays, concerts), streaming services, sports tickets, books, and hobby-related costs
• Debt payments: This includes monthly payments on credit cards or to lenders for student loans, mortgages, personal loans, auto loans, or other types of loans or lines of credit
How to Use the Monthly Budget Calculator
A free monthly budget calculator can help you take control of your money and reach both short- and long-term financial goals. This tool can show you how your spending shapes up and reveal how much you are able to save each month.
Step 1. Enter Your Monthly Income
The first step is entering your total monthly income before taxes. You can check your pay stubs to find your pretax earnings. If you’re paid weekly or biweekly rather than monthly, you can multiply your pretax earnings by the number of paychecks you receive annually (52 or 26) and then divide by 12 to determine your monthly income.
Step 2. Enter Your Income Taxes
To find this information, rather than finding your tax bracket and crunching the numbers yourself, you can check your pay stubs to see how much you’re paying toward income taxes. Then multiply that amount like you did above for income to find your annual income taxes and divide by 12 to get the monthly figure. This will be subtracted from your income by the monthly budget calculator.
Step 3. Add Your Monthly Expenses
There are a good number of spending categories (such as health care, clothing, education, and transportation) included in the monthly income budget calculator. You can consult your credit card or bank statements to tally up the totals for each category. (Some financial institutions give you a snapshot of your spending categories; double-check that they align with what you are inputting into the calculator.)
As you enter this information, you are likely to see how your needs vs. wants compare. You may be surprised, for instance, to see how your grocery bill (reflecting your needs) and your dining out expenses (which are wants) stack up.
Step 4. Determine Your Net Monthly Savings
After entering your income taxes and other expenses for the month, the monthly budget calculator will reveal your spending and your net savings (your income minus everything that is deducted from it). Note that one of the calculator’s categories captures any deposits you are already making into savings accounts, so what you see under “net savings” is essentially the additional funds you have to apply toward your financial goals. Those might include paying off credit card debt or saving for a wedding.
Benefits of Using a Budget Calculator
There are several benefits to using a budget calculator. Consider the following:
•
A budget calculator automatically determines where you stand in terms of your earnings, spending, and savings, without you having to use a calculator or pencil and paper.
• The free monthly budget calculator can provide a clear view of your income, spending, and savings, so you can retool your budget as needed, such as reducing a category of spending (a money tracker can help with this, too).
• The monthly personal budget calculator can help you improve financial management. It gives you a relatively quick and simple way to view the money going in and out of your checking and savings accounts. You can use this information to plan well for the future.
When using this monthly budget calculator, note that the output will only be as accurate as the information you put in. It can be worthwhile to do some upfront work to tabulate your income and expenses to make sure you aren’t guesstimating.
How to Use the Monthly Budget Calculator to Compare Scenarios
It can be helpful to experiment with different dollar values to see how extra earnings, additional debt payments, or changes in expenses will impact your monthly budget. For example:
• You could check whether picking up a side hustle would give you some extra wiggle room in your budget to accrue savings without cutting expenses.
• Alternatively, you might forecast what your future budget will look like after eliminating recurring debt, such as a car loan or student loans.
What Is a Budget?
Simply put, a budget is a plan for how you will save and spend your money you earn for a specific period of time. Personal budgets are usually structured monthly to account for bills and expenses due each month, including rent or mortgage payments and student loans, as well as buying your favorite breakfast burrito on Saturday mornings.
Budgets can be used to track spending to help prevent you from going into “bad” debt or to work toward specific savings goals, such as an emergency fund. Whatever your intention, budgets can be a helpful tool for better managing your finances.
How to Budget
There’s no one-size-fits-all approach to budgeting. Start by asking yourself key budgeting questions to identify your needs and goals. For instance, are you prepared for unexpected expenses? Would it benefit you to allocate enough time to really understand where every dollar of your income goes? Are you advancing toward your long-term plans, like homeownership?
Making a budget involves repeating the steps outlined above: adding up your income, calculating your income taxes, tallying up your expenses across spending categories, and allocating money to savings.
In addition to this monthly budget calculator, there are apps and strategies to help streamlining budgeting. Check to see if your financial institution offers an online budget planner that can help track spending and even spot unwanted expenses like subscriptions. If you don’t find a tool you like there, try third-party options, some of which may have free versions.
If you want to delve more deeply into budgeting once you’ve compiled all the essential information on income and expenses, there are multiple types of budgeting methods to consider using. Here are a few budgeting plans to look into.
• 50/30/20 budgeting: This method divides your monthly income into three buckets: 50% for needs, 30% for wants, and 20% for savings, like retirement or short-term savings targets, and additional debt payments. It offers some built-in flexibility, making it ideal for beginners.
• Zero-sum budgeting: Every dollar you earn is accounted for with this method, and it’s assigned a specific purpose, such as savings, debt repayment, expenses, or discretionary spending. This involves more effort to track how money is being used, but could yield richer insights about exactly where your money goes.
• Envelope-system budgeting: With this technique, you create envelopes for each spending category at the start of the month and put the allotted amount of cash inside the envelopes. The idea here is that you only spend the allocated amount of cash. If you wind up short on entertainment money on the 20th of the month, for example, then you need to hold out without any more entertainment spending until the next month starts, or you can borrow funds from an envelope where you have a surplus.
• Line-item budgeting: To implement this approach, create a column naming all income, expense categories, and savings, followed by one column for each month of the year. You’ll enter all your earnings, spending, and saving, and track your progress. It’s helpful to set targets for each category and leverage a spreadsheet on your computer to adjust as needed.
• Pay-yourself-first budgeting: Also known as reverse budgeting, this method automates savings from your paycheck. After paying yourself first (putting aside a certain amount for savings), the remaining money is intended to cover both nonnegotiable expenses and discretionary spending.
Coming up with a budgeting plan that works for you can take some trial and error. Here are a few tips to create an effective budget and stick to it.
• Track spending: Using an app can help automate this process. Not having a system to track spending is one of the most common budgeting mistakes.
• Plan for unexpected costs: Building up an emergency fund that can cover up to six months’ worth of expenses is recommended so you are prepared for medical bills, car repairs, or gaps in employment.
• Overestimate your expenses: It’s better to err on the side of caution and anticipate more spending on budget categories that aren’t fixed, such as groceries and transportation. (Don’t forget: Inflation is often a factor to contend with.)
• Don’t forget about those occasional expenses: It’s common to overlook infrequent expenditures like birthday and holiday gifts for loved ones and charitable donations during the year. Make sure to account for them.
• Involve a friend or relative: Accounting for all income and expenses in your household is essential to a budget. If you’re budgeting for one, finding an accountability buddy can help you both stay on track toward your financial goals.
Using a monthly budget calculator can give you a clear picture of how you’re earning, spending, and saving each month. After recording all your income, taxes, and expenses and checking your monthly status, using a budget strategy can help you progress toward your financial goals. A money tracker and other tools can also benefit you in this pursuit.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights—all at no cost.
See exactly how your money comes and goes at a glance.
Calculating your monthly budget involves balancing your income, expenses, and savings. There are different techniques to do this, such as the 50/30/20 budget rule or the zero-sum system, but the ultimate goal is to optimize your money and reach your financial goals.
What is the 50/30/20 rule for budgeting?
The 50/30/20 rule for budgeting calls for using 50% of income for needs, 30% for wants, and 20% for savings and additional debt payments.
What is the 70/10/10/10 budget rule?
The 70/10/10/10 budget rule divides income between four buckets: living expenses (70%), savings (10%), investments (10%), and charitable donations (10%).
How do I find my monthly budget?
To calculate your monthly budget, you need to find your income, expenses, and savings. Check pay stubs for a breakdown of your income and taxes, and consult statements from your bank, credit card, loan servicers, and investment accounts to get an idea of spending and saving every month. Then experiment with different systems, such as the 50/30/20 budget rule or the envelope system to land on a method that works for you.
How do beginners budget monthly?
Beginners can budget monthly using several methods. The 50/30/20 rule is an easy and flexible budget plan for beginners to follow. Others may prefer the envelope system since it’s a very tactile, hands-on way to see where your money is going.
What is the best free budgeting app?
The best free budgeting app depends on your needs and goals. You might start by seeing what tools your financial institution offers and then move onto third-party options. Using a monthly budget calculator can give you a valuable snapshot of your earning, spending, and savings before choosing a specific app.
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
